PERTH (miningweekly.com) – Gold explorer Novo Resources has exercised its option over ASX-listed GBM Resource’s Malmsbury gold project, in the Victorian Goldfields.

The companies in March inked a subscription agreement which resulted in Novo owning a 4.13% interest in GBM, as well as an option to acquire up to a 60% interest in the Malmsbury gold project, with the possibility of increasing this interest to 75%.

In exercising its option to acquire a 50% interest in the project, Novo will now issue GBM with 1.57-million shares, valued at around A$6.1-million. The Novo shares will remain in escrow for a period of four months.

Novo will have the right to earn an additional 10% interest in the project by spending A$5-million in exploration over a four year period. If the company did not incur this earn-in expenditure during the period, its interest in Malmsbury would decrease to 49%.

“We are delighted to have exercised our 50% purchase option over the Malmsbury project, following on from our share swap agreement with GBM earlier this year. Like the nearby Fosterville mine, Malmsbury is situated along the eastern margin of the Bendigo belt, displays high level vuggy quartz vein textures, elevated antimony and high gold grades,” said Novo chairperson and president Dr Quinton Henning.

“Historic production from the main part of the Malmsbury district delivered at very high grades. Through our recent option agreement covering the Queens project with Kalamazoo Resources, we have more than doubled our exposure to this high value target.”

GBM MD and CEO Peter Rohner said that the company was pleased to be partnering with Novo.

“Partnering with Novo allows GBM to accelerate exploration at Malmsbury while focusin on the company’s own expenditure on its district-scale, flagship Mt Coolon epithermal gold project in the Drummond basin of Queensland. GBM is currently advancing a 5 000 m drill programme at Mt Coolon, while commenced in early September.”